The proposals launched by financial services commissioner Maireád McGuinness aim to “improve the detection of suspicious transactions and activities, and to close loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system”, the commission said in a statement.

Money laundering is a major problem within the European Union. According to estimates by Europol, roughly 1 per cent of the EU’s economic activity involves suspicious transactions.

The proposals to tighten money-laundering safeguards come amid pressure on Europe to increase enforcement, after several countries began investigating Danish multinational Danske Bank as it came to light that more than €200 billion in suspicious transactions passed through its small Estonian subsidiary between 2007 and 2015.

The new plan includes extending existing anti-money laundering regulation that applies to financial services to “the entire crypto sector”, requiring all cryptocurrency service providers to verify the identity of those sending and receiving transactions. In addition, “anonymous crypto asset wallets will be prohibited” under the plan, which also bans cash payments of more than €10,000.

“Those involved in the cryptocurrencies space will now realise that anonymity is gone,” Ms McGuinness told The Irish Times. The identity of all owners of virtual assets, senders or receivers of transactions would have to be verified by crypto service providers.

“This identifies who’s sending, who’s receiving, and it will allow us all to track suspicious transactions,” Ms McGuinness added, saying the rules would bring the crypto sector in line with the rest of the financial industry.

“Same activity, same risk, same rules. So in other words, we’re just asking those who are engaged in the crypto sphere to be covered in the same way as their counterparts.”